Unethical Practices Essay

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Unethical Practices of Arthur Andersen Carol Hornsby ACC/260 09/14/13 Jana Rideout 1. What did Arthur Andersen contribute to the Enron disaster? Arthur Anderson, as Enron's accountant was supposed to objectively review the condition of company's finances and report on that condition honestly. He contributed by failing to have Enron establish and enforce internal controls. He also destroyed audit papers which in turn covered up deficiencies that contributed to Enron’s disaster. Instead of being ethical and honest Arthur Anderson helped Enron defraud investors and the public by helping the company keep material information private. Enron gained false credibility because AA was highly respected in its field and nobody questioned the reports that were being released. Arthur Anderson received jail time for his role in the Enron scandal, mainly for obstruction of justice for destroying records. 3. What was the prime motivation behind the decisions of Arthur Andersen’s audit partners on the Enron, Worldcom, Waste Management, and Sunbeam audits; the public interest or something else? Cite examples that reveal this motivation. If you look at our readings for this assignment it is clear that the prime motivation behind the decisions of Arthur Andersen’s audit partners was the generation of revenue. AA wanted to make as much money as possible plain and simple. They were driven by greed and competition. The audit partners wanted to make a profit and kept only the clients that made them that profit. An example of this is that “audit techniques were modified to require higher levels of analysis, and lower investment of time” (Brooks, 2007). Doing this allowed for bigger time crunches. No one saw the conflict of interest as a problem. They figured that you could make more money by cutting corners and no one would get hurt, but unfortunately when dealing with
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